Franchised service station operator United Petroleum is under the pump after allegations of a wage theft cover-up emerged late last week.
The Fair Work Ombudsman (FWO) has launched legal against the franchisor in Federal Court, accusing the chain of impeding an investigation into underpayment liability. According to the FWO, United Petroleum breached the Fair Work Act by failing to provide any records or documents to investigators, despite being issued a notice to produce.
The investigation was launched in 2018 after alleged contraventions of workplace law emerged at the United Petroleum Coopers Plains outlet.
Initially, the FWO aimed to assess the franchisor’s liability in connection with the contraventions, which occurred at the Brisbane outlet while under the operation of Parashar’s Pty Ltd, under an agreement with United Petroleum.
The franchisor’s alleged failure to comply with the FWO’s requests sparked concern from the regulator, which has now turned into a Federal Court battle.
United Petroleum cover-up
If proven, United Petroleum, which operates 440 outlets across the country faces a penalty of up to $63,000 for the alleged Fair Work Act breach.
Sandra Parker, Fair Work Ombudsman said franchisors that deliberately impede investigations damage the integrity of the sector, and must be held accountable.
“Notices to Produce are an important tool that Fair Work inspectors use to obtain documents we require for our investigations and businesses that fail to comply with these requests could face court action,” Parker said.
“Franchisors and franchisees should also be aware that enforcing compliance with workplace laws in the franchising sector continues to be a priority for the Fair Work Ombudsman.”
In addition to the $63,000 penalty, the FWO is also seeking a court order that would require United Petroleum to produce the records.
Systematic failings
It’s not the first time United Petroleum has come under fire for workplace breaches. In 2017, after a two year FWO investigation, five out of 12 audited United Petroleum outlets were found to have underpaid workers.
Of the 12 sites, 11 were owned by franchisees or commission agents, with many of the exploited workers found to be migrant employees with little knowledge of their rights and entitlements.
The underpayment concerns prompted the FWO to issue an invitation to enter into a compliance agreement, an offer that United Petroleum reportedly refused on more than one occasion.
However, with new allegations set to hit court in the coming months, further pain may be on the way for the service station franchisor.
A directions hearing is set to hit Federal Court in Melbourne on 6 November.